regarding tds on salary

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bhavik (Querist)
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29 December 2008 TDS on salary is to be made on the time of payment only , is it include constructive payment also ,

suppose , in pvt.ltd.co. salary of director is credited to his a/c but not actually paid to him in monetary terms then TDS is to be made or not ???????

how the rate is to be calculated for TDS on salary ??? anybody can show me the working suppose taking salary 1lac p.m. & having all the benifits of max. deductions & basic exemp. limit considering p.y.08-09

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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30 December 2008 * For TDS on salary payments - work out the anticipated salary of each employee on the basis of previous years salary in the beginning of the year.
* Take care of anticipated increase in salary of each employee during the current year while forming the estimate of the salary payments to be made during the year.
* Work out the tax to be deducted at source on the anticipated salary at the prescribed rates and divide the same by 12.
* Deduct 1/12 of the tax in every month from the 1st month of the financial year i.e. April.
* Increase the amount of monthly TDS from the month in which any unforeseen increase is made to the salary of any employee on account of any Bonus, Arrears of Salary, Dearness Allowance, etc. which could not be foreseen in the beginning of the year.
* Reduce the TDS amount in the last quarter or month if any excess deduction made in the earlier months.
* Do obtain necessary evidences for savings/payments before allowing credit for granting of rebate/ deductions.
* Please write short note with the TDS return on variations of TDS made in different months specifying the reasons for increased TDS deduction during the close of the year,specially if TDS is not made in equal installments during the 12 months.
* Pay interest @ 12% per annum u/s.201(1A) of the Income-tax Act on differed payments i.e. on TDS amount which was deductible in the initial months of the financial year from the month in which TDS was due to the date of payment of such TDS amount.